2016 (12) TMI 1177 - AT - Central Excise

Imposition of penalty u/r 13(2) of Central Excise Rules, 2002 - the appellant took credit in their books i.e. Cenvat Register, which was earlier debited by way of pre-deposit during the pendency of appeal - whether the appellant was not entitled to take suo-moto credit in absence of any provision under Central Excise Law permitting suo-moto credit? - Held that - there is no element of suppression or fraud in taking of credit of pre-deposit which was paid by way of debit in the Cenvat Account, pending disposal of the appeal. Under the facts and circumstances there has been no violation of any Act or Provisions of the Rules. We find the penalty imposed is not sustainable. Accordingly, we set aside the impugned order and allow the appeal - decided in favor of appellant-assessee.

Summary

Issues:
Confirmation of penalty under Rule 13(2) of Central Excise Rules, 2002 for taking credit in Cenvat Register pending appeal.

Analysis:
The appeal was made by Dabur India Ltd. against the penalty imposed under Rule 13(2) of Central Excise Rules, 2002. The appellant had initially made a pre-deposit pending their appeals, and upon the final decision by the Tribunal, they took credit in their Cenvat Register, which was earlier debited during the pendency of the appeal. The Revenue issued a show cause notice (SCN) as they believed the appellant had taken credit without proper documents as required by Rule 9 of the CCR, 2004. The penalty was proposed under Rule 13(2) of CCR, 2002 read with Rule 27 of CER, 2002. The appellant argued that there was no prescribed procedure for taking re-credit of amounts debited for pre-deposit pending the final decision in appeal. They contended that no fraud or misfeasance could be alleged, and no specific rule or section of the Act had been contravened. The Commissioner (Appeals) rejected the appeal, citing non-compliance with prescribed modalities in the circulars issued by the Board.

The Tribunal found that there was no element of suppression or fraud in the appellant's actions of taking credit for the pre-deposit. They determined that under the circumstances, there was no violation of any Act or provisions of the Rules. The Tribunal held that the penalty imposed was not sustainable and set aside the impugned order, allowing the appeal. The appellant was declared entitled to any consequential benefits. The Tribunal's decision was dictated in the open court by the members.